MINNEAPOLIS (WCCO) — The coronavirus outbreak in China has led to a drop in crude oil prices, which has a ripple effect in the United States.
The average price per gallon in the Twin Cities has dropped 17 cents in the past month, down to $2.31.
“Feels nice on the wallet, definitely. Save a couple bucks here and there,” Minneapolis resident Nathan Kemmer said.
And it could keep trending in that direction as cases of coronavirus continue to move in the opposite direction, says Augsburg University economics professor Jeanne Boeh.
“We don’t know when it’s going to end. We don’t know when we’re going to reach the peak of the virus and when it starts to go down,” Boeh said. “China is a major importer of crude oil, and so there’s been less travel in China overall, and so a consequence, the demand for oil has gone down.”
And it’s not just fuel for cars that’s being impacted, but the cars themselves, since some automotive factories China remain closed due to the outbreak.
“And even if the part isn’t coming directly to the U.S., it may be going to another place to be put into a component that comes eventually to a car that’s assembled in the U.S.,” Boeh said.
Lastly, the tech sector. Many of Apple’s products — from iPhones to AirPods — have parts made in factories in China, where many of the employees can’t work for safety reasons.
“Companies are already ramping up for next Christmas. And some of those prototypes and those kind of things happen in China right now, and so if those don’t happen, that pushes back the schedule all the way until next Christmas,” Boeh said.
She adds that many workers in China are going without a paycheck right now, which will affect how much money they spend.
More than 1,000 people have now died from the coronavirus. No one has died in the U.S., but the 13th case of the virus was confirmed Monday in San Diego.
More than 42,000 people are infected, with most cases in China.